Market participants expect the Federal Reserve Chairman Ben Bernanke to make an announcement of monetary easing measures in his delivery speech in front of the Congress Tuesday. Investors feel that bold measures including easing in the monetary policy will boost liquidity in the financial system.

Uncertainties in the euro zone economy continue to be a cause for concern to the investors. The inability to seal the deal on the main elements of the recent EU Summit has become a major worrying aspect for market players.

Meanwhile, the International Monetary Fund (IMF) cut its global growth forecast for 2013 to 3.9 percent from the 4.1 percent predicted earlier in April. The IMF noted that the escalation of the euro area crisis will further worsen global economic growth. This has raised market players' expectations that policy makers in Europe will ensure implementation of measures to revive the euro zone economy and support growth.

Market participants also expect China to take monetary easing steps to rejuvenate the weakening economy and regain the growth momentum after its gross domestic product growth slowed down in the second quarter to the lowest rate in three years.